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Evidence suggests that providing housing to certain high-need, high-cost patients can transform lives and have a very meaningful return on investment. This road map provides governors with a step-by-step guide to creating greater access to housing solutions for high-need, high-cost Medicaid enrollees.

Governors are uniquely positioned to take advantage of innovations in health system transformation to achieve the three-part aim of improving the health of state residents, improving the quality of care residents receive and reducing health costs for families and the government. Increasingly, Medicaid and other health care expenditures are a significant driver of budgetary pressure on states and accelerate momentum to find sustainable health care solutions.1 For example, a disproportionately large portion of states' Medicaid budgets are used for a small segment of the Medicaid population's care: About 5 percent of Medicaid enrollees nationwide account for more than 50 percent of all Medicaid spending.2 Those high-need, high-cost enrollees (commonly referred to as "super utilizers") also have complex health and social needs.3 Eighty percent have three or more chronic health conditions, and 60 percent have more than five.4 A majority have mental health or substance use challenges or both but have limited access to outpatient behavioral health (BH) services (and virtually no access to evidence-based practices [EBP] in those domains).5

This population also has a range of challenges in social determinants of health, such as safe and affordable housing, food security, employment, social connectedness and transportation.6 When these basic human needs go un- or under-addressed, illness self-management and routinely accessing primary care is secondary. The result is often an overreliance on more costly sites of care, such as emergency department (EDs) and inpatient hospital services, for non-emergent issues.7 Redirecting state funds to effectively address the social service needs of this population can improve health and functional outcomes of high-risk Medicaid enrollees, break down the barriers that segment the continuum of services required by this complex population and rein in escalating health care costs.

Evidence shows that programs that have been successful in breaking the cycle of avoidable acute care utilization and time in other public institutions (e.g., corrections) invest in well-coordinated transitions to and among outpatient primary and BH care, evidence-based pharmacotherapy and social services interventions.8 Among the most important interventions for this group is addressing homelessness and housing instability.9 Some estimates show that as many as one-third to almost half of high-need, high-cost individuals are homeless.10 Both pioneering and emerging programs are prioritizing housing interventions as a means of cost-effectively intervening with this subset.11

Housing as Health Care

Housing First is an evidence-based, permanent, supportive housing intervention for chronically homeless individuals that has the potential to improve health outcomes and reduce costs to health care and other public safety net programs.12 It is a person-centered approach that focuses on immediate access to permanent, safe and affordable housing without contingencies. Community-based treatment, rehabilitation and support services are available and voluntary. Housing First is especially cost-effective for the high-need, high-cost population because it may reduce ED and hospital inpatient utilization, shelter use and cost to the criminal justice system.13 Originally designed for homeless individuals who have serious mental illness and substance abuse disorder, the model is relevant to a large subset of the high-need, high-cost population and a key component of emerging models.14

When access to permanent supportive housing programs is insufficient, some health systems have developed short-term solutions to provide shelter for homeless high-need, high-cost individuals who, although no longer in need of acute care, require more frequent contact with health providers to recover from injury or illness. These respite care programs, such as that in Seattle-King County, Washington, provide 24-hour shelter as well as health care and psychosocial interventions during the stabilization period.15 Housing First is the more effective option in the long-term, but medical respite is a cost-effective component of a continuum of care for homeless high-need, high-cost individuals who cannot immediately be placed in supportive housing. Significant reductions in inpatient days and readmissions as well as increases in primary care visits have been observed in the respite programs.16

State health leaders are actively pursuing solutions for homelessness as part of health system transformation efforts, working with their housing counterparts to build linkages and use resources effectively. Recognizing the value for these individuals and the Medicaid program, many are taking advantage of clarification from the Centers for Medicare & Medicaid Services (CMS) on coverage of housing-related activities and services for individuals with disabilities to maximize payment for services through Medicaid.17

The National Governors Association's Work on Housing as Health Care: Development of the Road Map

Over the past three years, National Governors Association's (NGA) Health Division has engaged in comprehensive technical assistance to 10 states and one territory—Alaska, Colorado, Connecticut, Kentucky, Michigan, New Mexico, Puerto Rico, Rhode Island, West Virginia, Wisconsin and Wyoming—to develop statewide plans to establish or advance programs to improve outcomes and reduce cost of care for high-need, high-cost Medicaid enrollees. Over the course of this work, states have become increasingly cognizant of the need for housing solutions to cost-effectively address the needs of a subset of these populations—a subset that tends to be unstably housed. As a result, a parallel project with 5 states has focused on specific housing solutions for this population and the intersection of housing and health care.

The road map was developed for both the immediate need to support those state planning efforts and broad use by all governors interested in the promise of housing as an essential element of improved health and reduced utilization of costly health care services. Extensive research and consultation with senior state officials, federal agencies, local providers and national experts in health and in housing informed the road map.

The core elements of the housing for health approach include:

  • Building partnerships with key housing and health stakeholders;
  • Using a data-driven approach to identify the target population and systems-level gaps and opportunities and inform resource allocation and program evaluation;
  • Incentivizing and implementing EBPs, including Housing First;
  • Leveraging the state's role as purchaser and administrator;
  • Enhancing Medicaid's role in scaling up supportive housing approaches and realizing improved health outcomes and cost savings;
  • Increasing access to safe, decent and affordable housing; and
  • Demonstrating improved health outcomes and a reduction in health care expenditures.